is any one else worried about recession??

Fed cuts interest rate

WASHINGTON - The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday, the biggest one-day move by the central bank in recent memory.

The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the United States. It marked the biggest one-day move by the central bank in recent memory.

The Fed decision was taken during an emergency telephone conference with Fed officials on Monday night. Those discussions occurred after global financial markets had plunged Monday as investors grew more concerned about the possibility that the United States, the world's largest economy, could be headed into a recession.

In a brief statement, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth."

The central bank said that the strains in short-term funding markets have eased a bit, but "broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets."

The move caught financial markets by surprise. Many had expected the central bank would wait until its meeting next week to make any move in interest rates. The Fed made the move before markets had opened in the United States, hoping that the bold move would limit the decline in U.S. stocks.

Before Tuesday's move, the Fed had cut interest rates three times, beginning in September, the month after a severe credit crunch had roiled Wall Street and global financial markets. The Fed cut the funds rate by a half-point in September and then by smaller quarter-point moves in October and December.

In its statement, the Fed said, that "appreciable downside risks to growth remain" and held out the prospect of further rate cuts.

"The committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risk," the Fed statement said.

The Fed's action was approved on an 8-1 vote with William Poole, president the Fed's regional bank, dissenting. The statement said that Poole objected because he did not believe current conditions justified a rate move before the Fed's meeting next week.

Re: is any one else worried about recession??

I think a recession is pretty much inevitable.

But I am not worried. I will continue to work, continue to pay my bills and do the best I can with what I have. A struggling economy is always rough - but we have faced it before and have come through each and every time! I buy what I can afford and forgo what I can't. And I look for the end of the recession and the start to a better, booming economy!

Re: is any one else worried about recession??

What goes up, must come down. It's the natural order of things.

I'm not worried too much. I think it will be beneficial to us since we are first-time homebuyers looking in a buyer's market.

Re: is any one else worried about recession??

Like the other posters I'm not that worried. I'm not happy about it, but you use it as an opportunity in some areas and smartly navigate through it. Its inevitable, markets have to adjust.

Re: is any one else worried about recession??

Its good for firsttime home buyers for sure but what worries me is that things will start getting really expensive like food and that people will lose there jobs.

Re: is any one else worried about recession??

I'm slightly concerned. We just bought our home during this whole credit crunch/decreasing home values. We bought well under the appraisal at the time and with improvements I hope to keep it apprasing well...but I do worry that the home I just bought will fall even lower.

However, that said, if you have bought a house that you will live in for the long term then you will weather any recession or storm. It's a natural progression. And if you are looking for a home (like we were) you will do well. In 5-10 years I think we will be back up again.

Re: is any one else worried about recession??

I truly am not worried bc our home was a long term investment. We don't plan on selling anytime in the near future. It is a house for us to grow into. We will both continue to work & pay the bills we have. We are fortunate enough to not have debt, so whatever extra saving we can do, we will.

Just like someone else said, it is the way of the world. Things go up & down all the time. Even though we are on a downward turn, it will go back up at some time. It might be years but it will.

Message edited 9/22/2009 3:50:43 PM.

Re: is any one else worried about recession??

yes, I'm concerned. If we go into a full fledged recession people will lose their jobs and our economy will be hit even harder.

This is very real and no one is insulated against it.

Re: is any one else worried about recession??

Re: is any one else worried about recession??

Re: is any one else worried about recession??

Re: is any one else worried about recession??

Posted by Ophelia

Posted by Blu-ize

yes, I'm concerned. If we go into a full fledged recession people will lose their jobs and our economy will be hit even harder.

This is very real and no one is insulated against it.

I agree.

this has gone way beyond the credit/housing market.

people in the private sector will be hit hard in some spots...especially with job losses

I hope everyone has that extra put away just in case.